SBA makes it easier for large borrowers to take PPP loans

The Small Business Administration (SBA) has announced that it will eliminate the need for a loan review for Paycheck Protection Program (P3) loans of $ 2 million or more.

The announcement is a 180-degree turn for the agency. SBA received widespread backlash at the start of the pandemic for clearing publicly traded companies companies to receive PPP funds when small and minority businesses were ignored.

In its announcement, the SBA added that it will publish an FAQ on the subject soon. Carmen Calzacorta, an attorney from Schwabe, Williamson & Wyatt, said INC change is “a saving of time and money”.

Calzacorta added that the additional reviews pushed some PPP loan applications from the five-month decision timeframe to around eight months. The review asked for a significant amount of financial information, including available capital, gross income, a list of highly paid executives, and questions regarding business and business operations.

However, the SBA’s financial information requests were added to prevent publicly traded companies that did not need the emergency funding from operating the PPP. At the start of the pandemic, many companies jumped at the chance to take funds they didn’t need, including Shake Shack, the Los Angeles Lakers basketball team and Ruth Chris’ Steakhouse. All three were ashamed to return the PPP funds.

It’s not just the big companies that have taken PPP funds. Several citizens took PPP funds and were charged with fraud, including a San Jose resident who bought cryptocurrency stocks and a Tesla with PPP funds and a Newark women who has been charged with wire fraud, SBA fraud and money laundering

The PPP gave more than 800 billion dollars in emergency funding since the start of the pandemic to more than eight million small businesses in the United States. Black PPP borrowers and small businesses have received over $ 14 billion in PPP loans.

Despite the rule change, additional financial information could still be requested by the ASB. Federal programs are typically audited years later, Calzacorta says, and businesses must keep all the information they used to get a loan for six years.

About Renee Williams

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